For most couples living in New Mexico, a home is the biggest purchase that will be made during the marriage. Buying a home can be as big of a commitment as getting married. The average marriage in America lasts 8 years. The average home mortgage lasts 30.
A home can be a huge commitment in terms of emotions, resources, time, and mobility. Homes are a huge decision in both life and divorce. Because of this fact, New Mexico divorces often include the important question, “Should I sell my home after divorce?”
HOW ARE MARITAL HOMES DIVIDED DURING DIVORCE IN NEW MEXICO?
A martial home is usually divided in one of two ways:
- One spouse buys out the other spouse’s interest and keeps the home; or
- The couple sells the home and splits the equity or debt.
EMOTIONAL REASONS TO KEEP MARITAL HOME AFTER DIVORCE
There are many reasons to keep the home after divorce. Most of the decisions that we make in life are either rooted in emotions, or logic.
There is an emotional component when deciding whether to sell or keep your home after divorce. Sometimes a home becomes a personal extension of oneself. Possibly you have envisioned yourself growing old in your home. Maybe your home is loaded with positive memories that you do not want to let go.
For any number of emotional reasons, it may be difficult to let go of your home after divorce.
LOGICAL/PRACTICAL REASONS TO KEEP MARITAL HOME AFTER DIVORCE
Keeping a martial home is not just emotional – it can also be practical. On the practical side, keeping the marital home can maintain stability and predictability in a child’s life. Moving a child away from their neighborhood friends can be a traumatic experience. Divorce is difficult enough on children, without he added stress of moving away from one’s childhood home and friends.
Other practical reasons involve dollars and cents. Possibly it makes financial sense to keep rather than sell your marital home.
SELLING A MARITAL HOME AFTER DIVORE
Whether emotional or practical, eventually divorcing spouses must decide whether to sell the home after divorce.
All divorces are different, so unfortunately there is not a one-size-fits-all answer to the question. With that said, there are several questions that you should consider when asking yourself, “Should I sell my home after divorce in New Mexico?”
IS IT A BUYER’S OR SELLER’S MARKET?
The timing of your divorce plays a large role in deciding whether to sell your home. As I write these words, home prices in Albuquerque are at historical highs. The demand for homes greatly outweighs the supply. Because of this fact, many buyers are experiencing bidding wars for homes.
2021 is a seller’s market and selling your home might make practical sense. Today’s housing situation is far different from the Global Financial Crisis of 2008-2009, when the housing bubble burst, causing home values to crash.
The decision to sell one’s home was far different after the housing crash because home values plummeted creating a buyer’s market.
IS YOUR MONEY BETTER OFF WITH A HOME, OR ANOTHER ASSET?
Another factor to consider is whether your money is better off with another asset, such as gold, stocks, etc. Possibly the housing market is a seller’s market – but the stock market is a buyer’s market due to a recent correction or crash.
When deciding whether to sell your home after a divorce, consider the rates of return you would anticipate receiving in a home vs. another asset.
WHAT ARE THE COST/BENEFITS OF SELLING THE MARTIAL HOME?
What are the actual costs in terms of selling the home? Are there necessary repairs that need to be done? Is the home outdated and needs a lot of work?
Also consider the realtor fees involved with selling the home. The average realtor fees to sell a home are usually 5 to 6%.
Are you selling one home to buy another? If so, when realtor and other fees are considered, possibly it makes more financial sense to keep your current home.
DO YOU WANT TO LIVE IN A HOME THAT IS LOADED WITH MEMORIES?
On the emotional/practical side of the equation, do you want to live in a home that is loaded with memories? Do you want to live in a home that you and your spouse built or improved?
Will certain aspects of your home remind you of your former spouse? Do you want to walk down memory lane every time you enter your living room?
Life is not all about dollars and cents. When deciding whether to sell your marital home, consider the emotional impact of keeping a home that is packed with memories.
WILL YOUR FUTURE PARTNER WANT TO LIVE IN YOUR MARITAL HOME?
Divorce is difficult, but eventually you will move on to another chapter in your life. In the next chapter, will your partner want to live in a home that you and your ex built or bought? Do you want the ghost of your former marriage potentially haunting your future relationship? Will the home potentially create a wedge between you and your future partner?
Consider the impact that your marital home will have on your future relationship.
CAN YOU AFFORD TO KEEP THE HOME ON YOUR INCOME ALONE?
You built your dream home that you love. You love every aspect of your marital home that was built or improved to perfection.
It is time to come to back to reality – can you afford to keep the marital home? Can you afford the mortgage payment, maintenance, repairs?
Can you refinance the home in your name alone?
Is your martial home now too big for your current needs? Would a condo or smaller home make more practical sense now that you are divorced?
When deciding whether to sell your home after divorce, come back to reality and consider if you can afford to keep the home.
Q & A FOR SELLING A HOME AFTER DIVORCE IN NEW MEXICO
CAN I BE FORCED TO SELL MY HOUSE IN A DIVORCE?
Yes. New Mexico courts generally will force the parties to sell the marital residence if the issue cannot be decided between the parties. In doing so, the court will usually split the equity/debt between the parties.
New Mexico judges generally order the home to be sold, because it is the usually the cleanest way to divide the asset. Ordering otherwise could be considered arbitrary and capricious, creating an appealable issue.
DO I HAVE TO SELL MY HOUSE IN A DIVORCE?
Maybe. You and your spouse can always reach an agreement on what happens with the home. This agreement will be included in the Martial Settlement Agreement that is necessary to complete your divorce. Your judge will likely order the home to be sold, splitting the debt/equity, when you cannot reach a mutual agreement regarding the martial home.
SHOULD I SELL HOUSE FIRST OR DIVORCE FIRST?
It is possible to sell the home while the divorce is pending. A marital home can be sold while the divorce is pending, by mutual agreement. However, selling the home before the divorce is granted usually is not a good idea. The act usually creates unnecessary issues, complicating the divorce.
Additionally, New Mexico courts almost never will grant a bifurcated divorce without an agreement on the home. In other words, the court will not finalize your divorce without an agreement regarding the home.
WHAT ARE THE PROS AND CONS OF SELLING PROPERTY BEFORE DIVORCE SETTLEMENT?
The cons greatly outweigh the pros. There may be a benefit to selling your home before a divorce settlement is reached if it is a seller’s market and you have received a truly unbeatable offer. Legally there really are no benefits to selling your home before a divorce settlement is reached.
The cons to selling your home before the divorce are plentiful. The biggest con to selling the home before an agreement is that it can greatly complicate your divorce.
WHO COVERS HOME REPAIRS DURING DIVORCE?
Home repairs are a community debt that are split 50-50. Home repairs determine the amount of equity/debt each party receives after the home is sold. Home repairs should be covered by mutual agreement, either in an Interim Order or MSA. A Special Masters may be appointed when the parties cannot agree on what repairs are necessary to sell the martial home. The Special Master determines what repairs are necessary to sell the home.
